Drug firms say layoffs on the way by yearend

Drug firms say layoffs on the way by yearend

ISTANBUL - Reuters
Drug firms say layoffs on the way by yearend

This photo shows a locked-up drug store during a 2009 protest by pharmacists. DHA photo

Drug companies in Turkey might resort to serious layoffs by the end of 2011, following a recent government decision to decrease drug prices.

Name brand drugs that have equivalent generic brands will be sold for a maximum of 60 percent of the reference value to drugstores, according to a Council of Ministers decision published Nov. 11. The rate was 66 percent before this decision.

The new decision was created in the framework of the “global budget,” an attempt by the government to keep health expenditures under control. This is the third decrease in drug prices ruled by the government since the end of 2009.

Drug companies’ revenues and profit margins are expected to be heavily affected by the decision.

“Drug companies will be affected very negatively by the recent changes. ...About 2,500 people remained jobless in past years due to decreases in drug prices. Firms tried to minimize costs to cope with such decreases until nowadays. However, there is no space left anymore [with the recent decision],” Secretary-General of the Association of Research-Based Pharmaceutical Companies (AİFD) Alp Sevindik told Reuters in a Nov. 11 interview.

Sevindik said the firms may have to rely on job cuts to face losses by the new regulation. “Local companies may particularly get into a bind.”

In order to define the price of a drug in Turkey, the lowest price for the same drug in Italian, French, Spanish, Portuguese and Greek markets is taken as a reference price.